Deemed Dividend – Section 2(22)(e) of Income Tax Act can be applied only in the hands of shareholder
Case Law Details
Case Name : ACIT Vs Bhaumik Colour Pvt. Ltd. (ITAT Mumbai)
Related Assessment Year : 1997- 1998
Courts :
All ITAT ITAT Mumbai
ITAT, Mumbai Bench ‘E’ Special Bench
ACIT Vs Bhaumik Colour Pvt. Ltd., ITA No. 5030/Mum/04 Dated : 19.11.2008
RELEVANT EXTRACTS:
35. The intention behind enacting provisions of section 2(22)(e) are that closely held companies (i.e. companies in which public are not substantially interested), which are controlled by a group of members, even though the company has accumulated profits would not distribute such profit as dividend because if so distributed the dividend income would became taxable in the hands of the shareholders. Instead of distributing accumulated profits as dividend, compan...
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can a private limited company give money to the directors on his resignation? if yes , then will it amount to deemed dividend u/s 2(22)(a) ?